The Micro Units Development and Refinance Agency (MUDRA) Loan Scheme, commonly known as the Pradhan Mantri Mudra Yojana, is a government of India initiative that offers loans to individuals and MSMEs through banks and non-bank financial institutions (NBFIs). MUDRA Yojana’s three loan programmes are Shishu, Kishor, and Tarun. Bank loans made under the Mudra system do not require collateral.
A public, private, or regional rural bank that satisfies the following criteria will be eligible for a MUDRA loan:
- Earnings should have been earned over the previous two year
- Net performing assets for the public sector, private sector, and regional rural banks should be less than 15%, 10%, and 6%, respectively. The sum of private and public net wor
- Sector banks have a total capitalization of more than Rs.250 crore. For regional rural banks, it should be more than Rs.50 crore.
- The capital-to-risk-weighted-assets ratio (CRAR) should be calculated in accordance with RBI rules.
Make Sure You Meet The Following Mudra Loan Eligibility Criteria
Mudra Loans makes loans to non-corporate, non-farming micro, small, and medium companies in rural and urban India (MSMEs). If you are a small manufacturer, you are eligible for the PMMY programme.
- Fruit and Veggie Vendor
- Agriculture-related individuals
Achievements under PMMY 2020
According to Mudra’s official website, the total number of PMMY loans sanctioned to date in the fiscal year 2020 as of 31 March 2020 is 6,22,37,981. The allowed amount is Rs. 337,465.13 crores, whereas the amount disbursed is Rs. 329,684.63 crores.
This strategy focuses on women, tribal communities, Dalits, and all other disadvantaged segments of society who are interested in starting enterprises or engaging in entrepreneurship. These are the categories for which the MUDRA loan is intended. It would help small businesses develop faster while also supporting low-income citizens in getting financial assistance and reaching a higher quality of life, therefore favourably contributing to the country’s overall economic growth.
MUDRA provides loans to MFIs and banks, lending to micro-enterprises with credit needs of up to Rs. 10 lakh. The following are the goods available under the MUDRA loan system, depending on financial requirements:
Shishu: This refers to loans up to the value of Rs.50,000.
Kishor: This category includes loans ranging from Rs.50,000 to Rs.5 lakh.
Tarun: This refers to loans ranging from Rs.5 lakh to Rs.10 lakh.
Yes, a MUDRA loan can be used to purchase a taxi, a passenger car, or a small goods transport vehicle. This loan can even be used to acquire an auto-rickshaw.
Can the MUDRA loan be taken for setting up a beauty parlour?
Yes, MUDRA loans can be utilised to build beauty salons, salons, gymnasiums, tailoring shops, motorcycle/cycle repair shops, dry cleaning operations, photocopying services, courier agencies, and medical stores.
What kind of businesses in the agricultural sector can avail of a MUDRA loan?
MUDRA makes loans to businesses that participate in the following activities that generate money or offer a means of subsistence:
- Keeping bees
- Poultry & Fishery
- Centres for agribusiness